On 8 February 2024, the Honourable Mr Justice Paul Webster KC dismissed an application to set aside a statutory demand served on Angola Group Holdings Limited (the “Company”) by Bai Jun Tian Cheng Limited (“Bai Jun”). Conyers acted for the successful respondent, Bai Jun, in opposing the application.

The background to the application concerned a 16 year history of legal proceedings between the Company and Bai Jun in the High Court of Hong Kong, which culminated in several judgments and costs orders obtained by Bai Jun against the Company. By an order of the Hong Kong Court of Appeal, the Company was ordered to transfer its entire shareholding in a company incorporated in Mainland China to Bai Jun and pay to Bai Jun the sum of RMB 2 million (which amounts to approximately US$290,010.60) (the “Court of Appeal Judgment”).

On 3 April 2023, Conyers, acting on behalf of Bai Jun, served a statutory demand against the Company for RMB 2 million pursuant to the Court of Appeal Judgment at its registered office in the BVI. On 17 April 2023, the Company applied to set aside the statutory demand on the grounds that it had a viable counter-claim against Bai Jun, which was allegedly capable of extinguishing its debt to Bai Jun under the Court of Appeal Judgment.

The hearing of the set aside application was eventually heard on 8 February 2024 after the Company changed its legal practitioners in the BVI on two separate occasions.

On 8 February 2024, in dismissing the Company’s set aside application, the learned judge stated he was not satisfied that the loan agreement which allegedly gave rise to the debt under the counter-claim had any reasonable prospect of success, and also found there to have been insufficient evidence to establish a counter-claim in relation to the alleged loan by way of an oral agreement. The Company’s set aside application was accordingly dismissed with costs in favour of Bai Jun and the learned judge authorised Bai Jun to proceed with an application to appoint a liquidator over the Company.

The Court’s dismissal of the set aside application shows its willingness to investigate and examine the merits of counter-claims made by impecunious companies to prevent a winding-up. In circumstances where the evidence presented by an otherwise insolvent company is weak and does not have a reasonable prospect of success, the Court is likely to dismiss that company’s set aside application and, where appropriate, authorise the making of an application for the appointment of liquidators.

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